IV seals deal with French company to guarantee largest satellite order of the decade
24Jun10

A joint press release issued by Intellectual Ventures and French company Thales Alenia Space announces that the former has sold the latter: "A significant patent portfolio describing hundreds of inventions related to satellites communication systems, as well as additional patent rights." This will allow Thales to get "access to the intellectual property rights required to build the Iridium NEXT constellation of satellites, under contract recently awarded by Iridium Communications Inc. Iridum is also receiving a license to the inventions required for the other parts of the Iridium NEXT communication system". The patents were filed by and awarded to Motorola and underpinned R&D the company was doing on the original design of the Iridium satellite constellation

The deal was put together by Vincent Pluvinage, General Manager for Strategic Acquisitions and Private Equity at Intellectual Ventures, along with his colleague Carlo Segantini. Both were at the recently concluded IP Business Congress (more about that on this blog over the coming days). I had a chance to grab a quick word with the two of them to learn more about te transaction.

Pluvinage told m that he had been tracking developments in satellite technology over a number of years, keeping an eye on who was doing what and how their projects were faring. He became aware that while the work Motorola was doing was of very high quality, the business the company hoped to build around it was not faring so well. In the end it went bankrupt and closed down - so Pluvinage bought the patents on behalf of IV to add to its existing satellitle portfolio.

It was then a matter of keeping a further eye on the developing satellites market to find a company that would need the patents. That turned out to be Thales Alenia Space. Earlier this month, Iridium announced that it had given the French company the contract to design and construct 81 satellites for the Iridium NEXT constellation in a deal worth over $2 billion. This after Coface, the French export credit agency, had agreed to issue, for the account of the French state, "a "Promise of Guarantee" which commits to cover 95% of the $1.8 billion credit facility for the project". What Thales Alenia Space did not have, however, was the IP it needed to operate freely in the US - Pluvinage and IV owned that. So Pluvinage, who is well connected in France, got in touch with the necessary players and the deal was done.

Basically this is a classic piece of aggregation which leaves everyone concerned happy. IV took the risk in investing in the portfolio in the first place and then on maintaining it. As a result, it makes money (though Pluvinage would not tell me how much). Thales Alenia Space, meanwhile, gets the freedom of action it needs in the US to fulfil the terms of the contract it signed; and Iridium gets its satellites. For its part, the French government facilitates a French company seal the biggest satellite deal of the decade and one that will keep jobs and engineering expertise in France. Three cheers for IV anyone!?!